Ultimately TEDPIX broke above its two consecutive years of decline very sharply and gained more than 20 percent in less than two months. It’s been an outstanding performance since 2012 which occurred due to removal of market’s fundamental risk factors that main participants were waiting for so far. International enthusiasm on joining Iran’s capital market regarding sanctions removal from one hand and the signs of fresh cash inflows both domestically and from pioneer foreign investors, from the other hand, has been the driving engine for the recent jump in Tehran’s Stock Market index TEDPIX-.

Now the point is to figure out whether or not this sharp move is going to continue and where the support and resistance points are. With buyers and sellers fighting fiercely for control, consolidation over the past two weeks drew a triangle formation on the chart. In our view, an eventual breakout of this formation will likely determine TEDPIX’s near-term direction.

What we are trying to forecast below is to recognize this probable move direction using technical principles.

1

Considering the big image from TEDPIX’s all life-time chart depicted above, bears the idea in mind that a new bullish momentum has started recently and from long term perspective, this move will last longer to test higher targets. Although in short-term basis, fears of a possible retrace is not far from investors views.

As mentioned earlier, TEDPIX has formed a consolidation zone in form of a triangle pattern during last two weeks. The top level of recent touches lies at 78450 level which TEDPIX has failed to pass. This can be demonstrated in the chart below. A decline has occurred followed by breakout failure to low of 77383 level on February 29th. Regarding this triangle, the main resistance is the recent top of the chart at 78450 which is needed to be broken strongly in order to resume the bullish move, on the other hand, the nearest support zone at 76460 level is the pivot point, in other words, a solid break below this level could trigger a bigger retrace to start.

2

From timing point of view, we believe that the recent minor retrace could end on March 14th and afterwards another impulse could begin and would last until April 10th to test a new high above 78450 at 83750 level.

Please note that this scenario is valid as long as the low at 74460 is held. In contrary, by breaking below this level, next support zone around 72000 is not surprising.